Car insurers in Australia are failing to properly explain the factors that are driving sharp and repeated premium increases for consumers who are already facing cost-of-living pressures while also failing to highlight savings opportunities, the Australian Securities and Investments Commission (ASIC) said in a Tuesday report.
Motor vehicle insurance premiums increased 8% in the 12 months to July 2025 following growth of more than 42% between 2019 and 2024, the regulator said after examining eight insurance brands across five insurers, representing around 72% of the market.
Insurers involved in the review included Suncorp Group (ASX:SUN) unit AAI, Insurance Australia Group (ASX:IAG), Allianz Australia Insurance, RAC Insurance, and Youi.
"Most insurers gave only generic explanations in supplementary documents, with some providing no explanations at all," said ASIC Commissioner Alan Kirkland. "This fails to meet the needs of customers trying to understand the reasons for significant price increases."
The ASIC also found that in cases where insurers charged more for paying in installments, they did not clearly explain in renewal notices that consumers could save up to 20% by paying annually. The regulator called on insurers to improve renewal and quote documents so premium information is clearer, more useful and easier to compare.
"There is no excuse why some insurers cannot communicate such a basic benefit to customers," Kirkland said.
In response to a query from MT Newswires, an Insurance Council of Australia spokesperson said the industry "is exploring options to explain premiums more clearly to customers, and is looking forward to engaging with the government on the premium transparency process announced in the budget."
Premiums in Australia have been under pressure due to various factors including rising extreme weather costs, insurance-linked taxes, and rising repair and vehicle parts costs, the spokesperson said.
Shares of Suncorp Group and Insurance Australia Group both fell nearly 2% in recent Tuesday trade.